§ 10.54 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber)
I beg to move,That the Ploughing Grants Scheme, 1960, a draft of which was laid before this House on 28th April, be approved.You will have observed, Mr. Speaker, that there is a similar Scheme relating to Scotland and I think it will be convenient for the two to be taken together.
§ Mr. Godber
Before I deal with the reasons for making the Scheme this year the House may wish me to give very shortly a summary of the outcome for the past year. Expenditure during the financial year ended 31st March was £9.37 million compared with £9.19 million the year before. Ploughings were affected by the prolonged drought, though to a lesser extent than in the previous year when the wet season caused a marked fall. There is always a time lag between ploughing and application for grant and that, coupled with the fact that the financial and ploughing grant years do not coincide, means that expenditure in any financial year does not entirely reflect the trend of ploughing under a particular Scheme.
There has been a marked improvement since the autumn. Ploughings under the 1959–60 Scheme are expected to reach 1,250,000 acres, which is almost as high as in 1957–58. Expenditure in the current financial year is expected to approach the £10 million mark once more. Despite a setback due to abnormal seasons—one wet and the other dry —the Scheme continues to operate at a high level.
I am aware that there has been criticism of the Scheme in some quarters, though it has been equally strongly defended in others as being the foundation of healthy ley farming. It is said that the Scheme is too rigid and encourages the ploughing up of leys before their productive cycle has reached its peak; alternatively that there is no need to go on encouraging rotational farming at all.
351 Following the criticism in the Caine Report that too little statistical information was available on the distribution of ploughing grants, we have begun to assemble more detailed information which will help us to assess their effects. We have made an analysis of claims received in England and Wales under the current Scheme. I find that nearly 40 per cent. of the grass ploughed up is five to seven years old and over. The next figure is even more significant— over 40 per cent. of it is ten years old or more.
That is something which is quite striking, but I should point out that these returns cover payments made in the period October last to March this year only, and therefore include a large proportion of autumn ploughings. The distribution for a full year could, of course, be somewhat different, but we can reasonably say that the Scheme is in no way rigid in its effects.
Though there has been a very marked increase in total ploughings since 1955, farmers in general do not plough up their leys regularly every three or four years simply in order to get the grant. For some it may be entirely the correct thing from the husbandry point of view to plough up after this length of time, and the four-year ley is, I understand, the rule in Scotland, where they practice a regular rotation of crops and grass. The qualifying period under the Scheme operates as it was intended to do by providing that the minimum age of grassland ploughed under the Scheme and for which we pay grant, is three years, and that is all.
I have brought out these points because on previous occasions there has been criticism, and the hon. Member who speaks so regularly on behalf of Scotland on this subject brings out this point. As far as England and Wales are concerned, at any rate, it is quite clear that quite a lot of grass brought into use in this way has been grass for a considerable period.
As to whether we have done enough to encourage rotational farming, there has been an increase of 1 million acres of rotational grass in the United Kingdom since the grants were re-introduced in 1952, of which about 800,000 acres is in England and Wales. But there is still 352 some way to go and I would refer the House to the statement in this year's Annual Review White Paper, in which it is said that there should be, within the framework of general policy,continuing emphasis on the better production and use of grass as a means towards reducing costs of production. In general, this will call for the maintenance or increase of the area of rotation grass.In this, ploughing grants play a useful part. They make a direct contribution to good husbandry and are an integral part of the total assistance available to farmers. As I have said before, they are paid at an early stage of the production cycle which is of particular assistance to the smaller farmer and they are, in fact, closely linked with the operation of the Small Farmer Scheme, in which we put additional sums for ploughing-up. This linking of the two gives an incentive to the improvement of so many of these small farms.
At present, roughly half the applications are in respect of farms of less than 100 acres and two-thirds in respect of farms of less than 150 acres. For the rest, the ploughing grant is in the nature of a general production grant aimed at encouraging farming practices which are in themselves desirable and we think it right and proper that the grants should be paid for work carried out, wherever this is done.
In conclusion, I should like to say something about the administration of the Scheme. Ploughing grants are subject to careful check against previous records, and a considerable proportion of claims in England and Wales are subject to field inspection. But one cannot dismiss the possibility of incorrect and sometimes fraudulent claims, and we have arranged to check all applications received under the current Scheme against cereal deficiency payments for four previous years, and we shall do this on a comprehensive basis for the future.
I am sure that the House will appreciate that this is a considerable operation, since the records available have been devised primarily to serve the administrative purposes of either Scheme but not of both together, and they must now be married up. We think that this will prove a valuable check, however, and will in addition take into the joint scrutiny applications for field husbandry or ploughing grants under the Small 353 Farmer Scheme. This will help to give us a very close check on any claims which might be mistaken or fraudulent, and it is a valuable safeguard. For that reason I thought it right to bring it to the notice of the House. I do not think there is any need to say more, because these Schemes are well known. I commend them to the House.
§ 11.1 p.m.
§ Mr. Frederick Willey (Sunderland, North)
We thank the Joint Parliamentary Secretary for his explanation of the purposes of the Scheme. We have noted that he has been a little more informative on this occasion than he—or his predecessor—has been in the past, and we are happy to note that he is rather on the defensive. He obviously feels that there is some legitimate and just criticism of the Scheme in present circumstances.
What I regret is that in justifying the Scheme he said no more than that there is some way to go. We want a better explanation of the continuance of the Scheme than that. This is an important Scheme, involving the expenditure of over £9 million. In fact, since the 1952 Act £61 million has been spent in this way. It is, therefore, important that the Scheme should receive the attention of the House. It is not sufficient merely to say, "We are going to spend £9 million or £10 million, because we have some way to go." Judging the matter in the light of such knowledge as we possess, it would seem that there is not a strong case for the continuance of the Scheme. This year the Government have cut the Price Review award by £9 million, and we are discussing a similar amount here. The purpose of the cuts, as I understand it, is to provide a disincentive, and yet, without any further consideration than that we have some way to go, we are asked to agree to the continuance of the Scheme.
We would all recognise the justification for the introduction of ploughing grants, and even possibly for their rein-troduction, but we are now considering the question of their continuance. No guidance as to the future has been given by the Joint Parliamentary Secretary or the Government. We are faced with the position that faced the Caine Committee; it is very difficult to justify the continuance of these grants, but we must 354 recognise that their discontinuance would be a disincentive. That means no more than that there is an obligation on the Government to consider agricultural policy. We cannot get an answer to this. I hope that we will have an opportunity to discuss this subject more broadly later on.
To deal with the points upon which the Parliamentary Secretary has been defensive; he told us that there has been a careful check, but we know quite well that his Ministry never thought of having a check until the Public Accounts Committee paid attention to the administration of these grants and the Comptroller and Auditor General made his Report.
What is the extent of the losses? Are they £30,000, £40,000, £50,000 or £100,000? There are hon. Members opposite who profess to take an interest in the expenditure of public money. Why are they not with us tonight? This is a matter which the Public Accounts Committee called to our attention.
What struck me as disturbing was that I gathered that the hon. Gentleman's Ministry does not have a computer. It is very revealing when a Ministry dealing with the sort of matters with which the hon. Gentleman's Ministry has to deal is not able to avoid the stigmatism of the Comptroller and Auditor General.
I do not want to make heavy weather of this. I say at once that in the administration of grants such as these there are bound to be mistakes, but what strikes me as significant is that apparently the Ministry never thought of having a check and was not in a position to have a check in England. Now it has been said that it is to set up the machinery for a pilot check. That is an extraordinary way in which to administer public funds.
It also emphasises the lack of conscious purpose behind the administration of these grants. If there had been a sense of responsibility, there would have been no need for the Comptroller and Auditor General to call the Ministry's attention to the need for some check. Although we escaped it tonight, generally when we talk about ploughing grants, all we get is some sort of jovial colloquialism about the grants helping to push the plough round the farm. We 355 are concerned with whether the expenditure of £60 million since 1952 has been justified.
As I have emphasised before, this is not solely a matter for the taxpayer. It is also a matter for the farmer, because the money comes out of the Price Review award and it makes it more difficult for the Government to pursue the policy which they profess to pursue to encourage economic production.
No one would dispute the purpose of the initial introduction of a production grant such as this, but what we expect to know is what has been the effect of this expenditure of public money. Just as we did not know that the Government did not have any proper supervision of the expenditure of this money until we got reports from the Public Accounts Committee and the Comptroller and Auditor General, so we now learn that the Government did not have the slightest idea of what was happening as a result of that expenditure.
It is fantastic that the Government themselves should set up the Caine Committee and that the Caine Committee should report in black and white that:There is a lack of information available as to the beneficiaries under the scheme. There is no indication of the extent to which the grants are going to the smaller farmer or to the grassland farmer; nor does the information enable us to say how many individual farmers are involved in the 100,000 applications for grant made each year. It is, therefore, difficult to arrive at a precise picture of the effect of these grants.I wonder what would be said about a nationalised corporation which was stigmatised in this way by a committee which had been set up to inquire into its affairs.
Right throughout the Report of the Caine Committee runs the theme that there is not sufficiently adequate information about the effect of these grants or indeed who is benefiting from them. The Parliamentary Secretary has given us some information. He was criticised on the last occasion when we discussed these grants. Surely it is very disturbing that after the Caine Committee has reported we have still no completely effective Government action following on that Report. The best the Parliamentary Secretary can do is to tell the House that he has begun to assemble some detailed information.
356 It goes further than that because the Caine Committee made some wide recommendations. Put in a kernel it said that we have to pay attention to management. If we are devoting these public moneys to the support of this industry we must also devote our energies to research. What progress have we made? The other day the Minister was kind enough to tell me that the question of research was being referred to the A.R.Cs to report on what steps should be taken about research. Is this a responsible attitude?
We are in difficulties, as we always are when we discuss these production grants, because we recognise that they are an inherent part of the Price Review. It would not be open to us to divide against the present Scheme, but I ask the Government for an assurance that this grant will be carefully reviewed within the next twelve months. It will not do to be forced into a position of not being able to justify such a grant as this after it has been in operation for a good number of years. If we consider this grant in isolation and then turn to the Price Review White Paper to which the Parliamentary Secretary referred, we find that the two things do not match at all.
We are disturbed about the fact that the Government are depressing agriculture by the views they express about it. They call for economic production without knowing what that means, but at the same time they are gripped with this inertia. As I have said before, I can see consolation to the Treasury by continuing such grants as this because they are not liable to big swings in the support which goes to individual commodities. For that bureaucratic reason a grant continuing year after year is considered significant and important to agriculture. It seems to us—and the Parliamentary Secretary has said nothing to disabuse our minds on the subject—that the position is that we are paying farmers for doing something which they would do anyway. Nowadays any progressive, intelligent farmer would do this.
§ Mr. Godber
The hon. Gentleman is advancing an interesting argument, but would not he agree that the figures which I gave refute what he has just said? I gave figures which showed that a large number of these grants had been 357 continued for a number of years. The whole basis of the argument of himself and his hon. Friends is that this is a normal procedure. I have tried to show on the evidence, whatever the hon. Gentleman has said about previous years that this could not be normal procedure in this long period.
§ Mr. Willey
The Parliamentary Secretary himself has said that it is an incomplete picture, which we accept, and we must not draw conclusions from it. So I ask the Government to accept the same advice themselves.
Secondly, to say this is, in a way, a reflection on the incentives provided in the Scheme and it is not answering the case I put forward. We are giving a payment to farmers to carry out normal good husbandry. There may be a case for making advance payments, but that is entirely a different matter.
These are the questions I would ask the Government to consider, but I beg and pray of them not to come to the House next year merely to continue the Scheme without further thought. I hope they will seriously consider this and will realise that this is not a matter only of support for agriculture but is of concern to the farmer because it comes out of the over-all February Price Review award.
§ 11.16 p.m.
§ Mr. John Morris (Aberavon)
In a country of high rainfall it is absolutely vital that we should have a policy based on the best possible use being made of our grassland. As has already been said, the fact that this grant has been paid in the past is no argument for the continuation of this system. We should have a reason for its continuation and there should be some indication of how long the system is to continue and whether it is to be an annual procedure, with the Minister coming to the House every year.
The original purpose of these grants was to increase the nation's food supply when there was a shortage. Now I gather the reason is to utilise our national asset of grass to the full to reduce the cost of production. Efficiency of production and cost are today of paramount importance.
I would take the following points in the Scheme: so far as the three-year period is concerned, is that the best period? It may well be that in the 358 present system of farming the Government are falling between two stools. There is today the popularity of the short-term ley, especially in Wales, my own country. The short ley is becoming increasingly popular, and the man who practises it gets nothing from the Scheme. Then there is the longer period medium ley, and if that is well managed there is an incentive in the Scheme to cut the period. There is, therefore, a tendency because of the rigidity of the Scheme for the Government to fall between two stools.
Again, where a ley has not taken properly there is obviously a tendency, where it has gone a number of years and has one more to go, for the farmer to say: "I will wait another year and qualify for the grant." That is an inherent difficulty in the present Scheme, and where leys have not taken properly there should be a procedure for the A.A.Cs. or some other independent body to examine it and to certify that, because of the shorter period, the farmer should also qualify for grant.
One of the criticisms of the present Scheme is that it is too rigid. I welcome the figures which have been given, but suspect that the Minister has begun to assemble figures as a result of the criticisms already mentioned by my hon. Friend, the Member for Sunderland, North (Mr. Willey) and mentioned in Paragraph 99 of the Caine Report. I sincerely hope that the Minister can publish more figures as to the working of the Scheme. A great deal of public money is involved and we should be able to know whether the country is getting the best possible value for the £9 million that is being spent.
I also welcome the figures given as to whom the grant goes. We should have known these years ago. This grant has been in operation for many years now. Why was the information not given earlier? I hope that the Minister by some sampling technique or in some other way can give us as broad and comprehensive a picture as possible of the workings of the Scheme.
One of the objectives of the last Price Review is the maintenance and increase of areas of rotation grass. I have checked the figures for Wales, and the latest figures available are contained in the Digest of Welsh Statistics published in 359 May, 1959. The last available year mentioned is 1958. In 1958 £770,000 was paid out in Wales. That has meant a decrease of 12,000 acres—10 per cent. less in 1958 than in 1957 and an even larger decrease over 1956. The Minister can argue till the cows come home about the variations of the weather, but certainly in 1958 there was a considerable decrease in Wales over the two preceding years. I should like to know something about the working of the Scheme as applied to Wales, and what prophecy the Minister can make about the operation of the Scheme in 1960.
As to the payment of the £12 grant, the date of 1946 has been rigid for many years. In 1957 it was brought forward from a period dating back to 1939. If the year 1946 was deemed to be the proper period in 1957 for the payment of the £12 grant, surely there should be some alteration in the date of 1946 three years later. It has been argued in the past that there should be some alteration to the provision whereby abnormally high expenditure should be incurred before one is entitled to the £12 grant. However, I am content to leave that as it is. But if the acid test is expenditure, surely there should be some variation in respect of the small man. Where a man is able to plough hundreds of acres of land and qualifies for the grant by reason of the abnormally high expenditure, his expenditure is pro rata lower per acre than that of the small man who has to hire machinery. In my submission, there should be a variation of this £12 grant for the small man.
The Parliamentary Secretary said last year, in the debate on the Ploughing Grants Scheme:We propose … to look at the operation of the higher rate of grant to see whether its administration could be made somewhat more flexible since we entirely agree with the Caine Committee that there remains a great deal of old pasture which would benefit by being ploughed up and put into a rotation."— [OFFICIAL REPORT, 6th May, 1959; Vol. 605, c. 486.]I wonder if the Parliamentary Secretary could comment on the results after looking into the administration of this £12 grant.
I wish to comment on paragraph 11 of the Scheme which relates to the power of the Minister to withhold payment of 360 the grant. At the moment the agricultural executive committee is the organ of the Minister in determining whether a grant should be withheld or reduced.
The Parliamentary Secretary may be aware that in Wales passions have been aroused over the last three or four years between the various rival organisations in agriculture. One of the organisations is able to nominate the panel of members of the agricultural executive committee, and it is upon the recommendations of that panel that some of the members of the committee are chosen.
It is essential that justice should be done. Without commenting any further on that issue, I would say that it may well be that some farmers who may be in conflict with some of these organisations may feel that if the agricultural executive committee is the judge in their case as to whether they should be entitled to a grant or whether a grant should be withheld justice is not being done. I am not suggesting that that is the situation at all, but I suggest that there should be some independent arbitrator, much as there is in the present system of licensing bulls—there is an independent system of arbitration where a licence is refused—and some system of appeal so that justice may be seen to be done.
The payments should be made quickly. If the farmer, particularly the small farmer, is to make the best possible use of the grants, it is absolutely vital that he should be paid quickly. I should like the Minister to inquire how long it takes after claims are certified before payment is made. There have been criticisms in the past. It is not the average time of payment that I want. I should like to know the longer ranges of time taken for claims to be met and the reasons for them. The Minister might feel it appropriate to instruct his officers to make the payments as promptly as possible.
While I accept that the Scheme is a good one for the small farmer in that the grant gives him assistance as early as possible in his production cycle, I question whether the big man needs the grant, for he would have ploughed in any event—unless he is a hobby farmer, in which case the Chancellor will deal with him. I question whether the terms and administration of the Scheme are 361 flexible enough as between area and area, farm and farm, and ley and ley. There are rather rigid proposals in the Scheme, and there ought to be more flexibility.
There must be large areas where farmers do not take advantage of these grants for some reason. I should like to know whether the Department's officers or the N.A.A.S. are able to discover who these people are and what acreages are involved, and whether anything can be done to make people utilise these grants. In this age of rapid development, particularly with chemicals, is ploughing today as important as it is made out to be?
§ 11.28 p.m.
§ Mr. William Ross (Kilmarnock)
I am concerned about the good name of Scotland and Scottish farmers in respect of the subsidy. I want an assurance from the tripartite Joint Under-Secretary of State for Scotland that it is absolutely essential to pay the money in this way, that it will be for the benefit of Scottish agriculture and that, without the grant, we should not get the benefits of healthy lands as they were expressed by the Parliamentary Secretary.
This is the tenth Scheme. It has been running since 1952, and this is one of thirteen subsidies available to Scottish farmers, apart from payments in relation to crops and other services which are made available to them by the Department. This is only one of thirteen such subsidies. It is not very long ago that a Conservative Minister went to an agricultural area in Scotland and proclaimed that subsidies were immoral. It was later discovered that he was talking about housing subsidies and not farming subsidies.
It is not so long ago, too, that the hon. Member for Argyll (Mr. Noble), who is no doubt within earshot if not in his place, aroused the ire of the Scottish farmers by talking about pouring money into a leaky bucket. Therefore, all the more do I want reassuring by the Joint Under-Secretary that this is not money that is being poured into a leaky bucket.
Someone has got to raise the question of the wisdom of Government expenditure of this kind. I would have thought, after all the letters in The Times, the violent speeches and promises of long 362 nights on the Finance Bill and pastings from Brighton for the Exchequer from those self-proclaimed guardians of the public purse, that more representatives of the party opposite would be present and vocal tonight.
Apart from the calf subsidy, this single subsidy is probably the most expensive in Scotland at the present time. It amounts to between £2 million and £2½ million. Therefore, we are not talking about chicken feed; we are talking about something of considerable importance. There are all sorts of other ways in which we in Scotland could spend that money if it were available, but if we are persuaded that it is right that the money should be spent in this way then it is up to the Joint Under-Secretary to persuade us.
In the past I have stressed that the danger of this kind of thing is that we are paying the farmer to do what the good farmer would do any way. Like my hon. Friend, I am alarmed about the whole procedure. We get all sorts of provisos. Paragraph 13 of the Scheme talks about withholding the grant whereadequate facilities for the inspection of the land in respect of which such a grant may be made have not been given.We get the impression of top administration. But when I read the Civil Appropriation Accounts presented to the House of Commons together with the Report of the Comptroller and Auditor General, I find in paragraph 100 something which certainly alarms me. It says:During an examination of payments of ploughing grant"—that is the Scheme with which we are dealing—my officers noticed a few cases where it appeared that fields stated to have been under grass for purposes of claiming ploughing grant "—which is one of the main qualifications—had in fact been producing oats, barley or mixed corn as evidenced by the payment of cereal deficiency payments relating to the same fields.Not bad, if one can get away with it. Evidently one can.When attention was drawn to these cases the Department of Agriculture for Scotland began a complete check of ploughing grants paid under the 1958 Scheme against cereal deficiency payments.There had been a complete check. I gather that by the time the Report was 363 drawn up the complete check had not been completed. The Report went on:By November 1959 the check of some 24,000 claims had disclosed 123 cases of overpayment of ploughing grants exceeding in total £8,000,"—and then, and this is a bright one—which it took the Comptroller and Auditor General to initiate:as well as a case of fraud in the Department involving nearly £1,000 and erroneous cereal deficiency payments totalling about £200.This is a serious state of affairs. First we get the impression that hitherto there has been no check. Remember this is the tenth year. Can we be given any indication as to how much money has been lost or overpaid by the Government Department over the previous years? Are we satisfied that this check against deficiency payments will be entirely satisfactory and that we have got to the full measure of the overpayment in respect of it? We must bear in mind that the Comptroller and Auditor General goes on to say in paragraph 101:It is to be noted that this particular check can reveal incorrect claims for ploughing grant only where the crop actually taken was oats, barley or mixed corn, on which deficiency payments are made on an acreage basis; it would not operate where the crop taken was wheat, rye or any other crop.That "any other crop" would include grants—I am informed that in Scotland the area in which the check does not operate is relatively small since the bulk of the Scotland cereal acreage is oats and barley; but since the check is incomplete I am obliged to report that in addition to the overpayments identified by it the present Account may also include further incorrect payments of unascertained amount.Before I give approval to this, I have to be satisfied that the administration is really efficient. Can we be given up-to-date figures as to the complete check on this matter, which I consider to be very serious indeed? Can we be assured that within the Department itself matters have been sufficiently tightened up to limit the possibility of fraud? How was it that fraud to the extent of £1,000 was eventually disclosed by this check being embarked upon? Can I be told what happened in relation to people who had been overpaid? Was it simply a question of the money being repaid? Was there any question of deliberate intention to 364 defraud the Department? I should have thought it a little difficult to make a complete mistake over receiving the two payments, for entirely different purposes, of these grants when the early basis for payment was, in this case I think 1955, and under the present Scheme, 1957. The land had to be under grass, yet it was found that previously a deficiency payment in respect of oats or one of these other crops had been paid.
What happened in relation to the overpayments? Have there been any prosecutions in respect of them? We are entitled to know how far the Government intend to proceed in order to have the law respected in England and in Scotland, with which I am particularly concerned. I know quite well the kind of howl that would have gone up from hon. Members opposite if it were in respect of a widow living in a council house who had been giving false returns in respect of National Assistance. The National Assistance Board checks this kind of thing periodically. I can remember a widow in Kilmarnock who had been overpaid. She was taken to court and sent to prison. What kind of justice is administered in respect of this kind of thing, which involved far greater sums? At least £8,000 was involved in 1958. We do not know what it was last year and what it will be next year will be determined by the completeness of the check on the administration. Most of the farmers in Scotland would deplore a Scheme which was administered with such laxity and lack of check that he and the other taxpayers were so defrauded.
We on this side of the House are not unwilling to give consent to any Government Measure for the benefit of Scottish farming. We are proud of what we did for it between 1945 and 1951. We intend to continue to support the Government in every Measure which is reasonable. But not only must it be reasonable; it must be seen to be administered with fairness to the general body of taxpayers
I ask the Joint Under-Secretary of State to convince me and the House that the Scheme is desirable and, having done that, to assure me that the administration is such that money will not only not be poured into leaky buckets but will not be handed to those who are holding out buckets to receive money to which they are not entitled. I also ask that the Government's further 365 pursuit of any fraud will be such as to make the law about these subsidies respected.
§ 11.42 p.m.
§ Mr. Thomas Fraser (Hamilton)
As the Joint Parliamentary Secretary hinted, I have participated in all the discussions we have had on these Schemes since we passed the 1952 Act, and I made many speeches during the passage of that Act. I have never liked these Schemes and I did not like the Act under which they were made. I cannot forget that the justification for the Act in 1952 was that we were desperately in need of increased agricultural production, and particularly of more land under the plough to produce the coarse grains which we could not buy from overseas to feed the fatstock we were trying to rear in increased numbers on our farms.
There have been many changes in the Government's agricultural policy since 1952, but for some reason or other they are able to continue these Schemes under the Act when the conditions which justified the Act in the first place have long since disappeared. After a few years the Schemes were adjusted to provide that ploughing grants should be paid notwithstanding that land was sown straight back to grass again. This year we have had a Price Review which makes it abundantly clear that Ministers are no longer interested in increased production from British farms. Increased productivity—yes; but increased production—no. And yet the grants continue.
What is the justification for them now? My hon. Friend the Member for Aberavon (Mr. Morris) called attention to some of the anomalies which arise under these Schemes. There is the farmer who, properly and wisely, in some parts of the country indulges in short leys of eighteen months, two years or two-and-a-half years—and he is cut out of the Scheme. Personally I am glad that such farmers are cut out, because I do not see why a farmer who finds it profitable and good farming to put land under grass for a year or eighteen months or two-and-a-half years should be paid £7 an acre for every acre of grass that is ploughed. But I can see no more justification for giving the grant to the farmer whose land is down for three or four years, which is the case in the 366 vast majority of acres which qualify for the £7 grant in Scotland every year.
I have said this so often that I feel a little guilty about saying it once again, but the majority of the fanners in Scotland know their business better than does the man in Whitehall. They know that it is good farming to indulge in rotational cropping of six to eight years' duration. They have three or four years in grass and three or four years in crops. All the good farmers in Scotland say that this is good husbandry in the land and climate that we have in that part of Scotland where arable farming is carried on.
Why should we give them £7 per acre every time they turn over an acre of grass three or four years old? It means that in nearly the whole of this arable farmland of Scotland we are paying out of the taxpayer's pocket £7 per acre for virtually every acre every six to eight years. By paying this money we do not get any additional acres brought into production; we get no more food; we do not produce any more coarse grain for feedingstuffs; we do not improve our grass in any way, because the farmers concerned tell us that they would not like their good husbandry to be spoiled by any bribes offered by the Government.
They say that these Schemes have had to be drawn so as to provide these regular grants to the vast majority of farmers who indulge in this rotational farming that involves them in ploughing every three to four years, so that they will get them for indulging in good husbandry and will not be obliged to indulge in an alternative form of husbandry which they think to be bad farming practice for the purpose of qualifying for the grants.
If we are to have a grant at all then it is better to have a grant which will not encourage farmers to do something which savours of bad husbandry. The truth is that any justification there ever was for the grant has long since disappeared.
I hope that the Joint Under-Secretary of State will not take it amiss if I remind him that many of his hon. Friends who have deigned to participate in these debates over the years have always advised that at least the Part I grants should be discontinued. If there was any case for these grants, more Members, who are themselves farmers and represent 367 farming constituencies on the benches opposite, would rise to defend them.
Last year, the hon. Member for New-bury (Sir A. Hurd) appealed to the Parliamentary Secretary not to continue with these grants. I noticed that he rose in his place when my hon. Friend the Member for Aberavon (Mr. Morris) caught your eye, Mr. Speaker. He then disappeared from the Chamber, so we are not to have his appeal tonight to the Parliamentary Secretary to discontinue the grants and we are not, apparently, to have a speech from the hon. Member for South Angus (Sir J. Duncan) who supported me in the last two years when similar Schemes were before the House.
When the Secretary of State for Scotland meekly and so wrongly followed the example of the Minister of Agriculture in withdrawing and then agreeing not to withdraw but substantially to reduce the marginal agricultural production grants, the Joint Under-Secretary of State will know that the N.F.U. in Scotland—the central organisation—after being heavily pressed in this matter by the county branches, appealed to the Secretary of State not to whittle down on the M.A.P. grants but to undertake any savings which the Exchequer wanted by reducing the ploughing grants. The National Farmers' Union of Scotland recognises that this is the least justifiable subsidy paid to the farmers by Her Majesty's Government. I hope that the Joint Under-Secretary will bear that in mind in any defence of this subsidy that he offers in the course of his remarks.
I entirely endorse all that my hon. Friend the Member for Kilmarnock (Mr. Ross) said about the Report of the Comptroller and Auditor General in relation to this Scheme in Scotland. I was mindful of the remarks of my hon. Friend the Member for Sunderland, North (Mr. Willey) in relation to the Scheme in Scotland as well as in England and Wales. It would appear that the Secretary of State has had a substantial check in Scotland, and that 123 cases of over-payment of ploughing grants have come to light. My hon. Friend the Member for Kilmarnock and I want to know in how many cases there have been prosecutions. I hope that hon. Members opposite will not think that we are callous and hard-hearted in asking about prosecutions.
368 My hon. Friend the Member for Kilmarnock is absolutely right. When any of our constituents is found to have defrauded the Ministry of Pensions and National Insurance of a few shillings— perhaps a widow has forgotten to inform the Ministry of the fact that she has had a part-time job—she is not only invited to repay the money that she has been overpaid; in many cases she is prosecuted.
§ Mr. Fraser
No—prosecuted and, if found guilty, given a prison sentence.
Other cases concern the National Assistance Board. Perhaps an old-age pensioner has omitted to mention the fact that he has some hard-won savings. These people are prosecuted successfully. If the Joint Under-Secretary would like to ask his right hon. Friend the Minister of Pensions and National Insurance, he will be able to find out in how many cases the penalty has been a prison sentence. Some of the people I have mentioned have acted inadvertently; they have not been aware that they were doing anything wrong in having a part-time job and still drawing these benefits. In other cases they have known they were doing wrong, but they have been doing it in order to live. I very much doubt whether, in any of the 123 cases which have come to light of farmers claiming ploughing grants in respect of land which has not been under grass, but in respect of which they have already got cereal deficiency payments, the action taken has been taken in order to live.
Justice should not only be done; it should manifestly be seen to be done. The action of Her Majesty's Ministers in relation to poor people who fall foul of the Ministry of Pensions and National Insurance or the National Assistance Board should at least be repeated by Her Majesty's Ministers who discover farmers or others who apply for subsidies from the public purse but make false returns. These people should be prosecuted in the same way as those mentioned by my hon. Friend are normally prosecuted. I hope that the Under-Secretary will be able to tell us in how many of these 123 cases prosecutions followed the disclosure of overpayment, and whether the overpayment was reclaimed and repaid.
369 I wonder whether the Under-Secretary can speak for his hon. Friend the Parliamentary Secretary and tell us a little more about what is happening in England and Wales, because although Scottish farmers have come out of the Report of the Comptroller and Auditor General badly, that is only because in the Scottish Office it was possible to make a check. The Comptroller and Auditor General said that his officers also discovered a few overpayments of ploughing grants in England and Wales, and he asked whether the Ministry intended to make a check on a scale similar to that made in Scotland.
The Ministry reply was that whereas in Scotland both ploughing grants and cereal deficiency grants were administered centrally, in England and Wales claims for cereal deficiency grants were authorised by the Ministry at headquarters and ploughing grants were authorised by divisional officers. The Comptroller and Auditor General went on to say that the Ministry was saying that the administrative cost of carrying out a check on the Scottish scale would be high, because it would be necessary to transfer a large volume of the cereal deficiency claims to divisional offices for the check to be made, but the Report says that a pilot check is, therefore, being undertaken, oddly enough, not to see to what extent there were overpayments, but with the object of measuring the value of a check against the cost.
When poor Mrs. Jones is prosecuted because she has claimed £2 15s. more than she is entitled to receive from the Ministry of Pensions and National Insurance, that Ministry does not measure the cost of the legal advice it will employ to prosecute Mrs. Jones against the amount of overpayment that she has claimed.
It would be useful if the Under-Secretary could tell us more than the Parliamentary Secretary did about the work undertaken by the Ministry in this pilot check and to what extent the overpayments discovered by the officers of the Comptroller and Auditor General represent the kind of abuse of the Scheme which has been going on throughout the country—and there has been plenty of time to do it, because the Report relates to the 1958 Scheme.
370 A few years ago, when we were discussing a similar Scheme, I called attention to the ease with which farmers could falsify their returns. I recounted my own experience of a farmer who claimed the hill cattle subsidy in respect of 36 hill cattle. The inspector went to see them and thought that he saw 36 hill cattle. In fact, what he saw were 12 hill cattle on three different sides of the same hill. When I described that falsified return, hon. Members opposite howled me down and would not let me say that any farmer in Scotland would make any claim for subsidy to which he was not entitled. The Comptroller and Auditor General has confirmed what I anticipated on that occasion and has done so in respect of a fair number of farmers in Scotland.
As my hon. Friend the Member for Sunderland, North said, it is difficult for hon. Members to vote against this Scheme when it comes up each year, unless one takes the view that farmers are getting altogether too much from public funds. That is not how we feel. We appreciate that the net income of the farmers has gone down while their productivity and the total production has gone up and up, so that it is not for us to vote for a further reduction in their income. But it is our responsibility on these occasions to call attention to the misuse of public money by Her Majesty's Ministers. I beg the Joint Under-Secretary to give us an indication that Her Majesty's Ministers are reconsidering this Scheme and considering the termination of Part I grants at an early date, and making whatever adjustments are necessary in the other payments to farmers in the Price Review settlements. If he does that, not only will the taxpayers feel that he is facing his responsibilities but the farmers will feel that at long last the Government are giving help where it is most needed.
§ 12.1 a.m.
§ The Joint Under-Secretary of State for Scotland (Mr. Gilmour Leburn)
We have had a wide-ranging and interesting debate on these Schemes and I shall try to answer as many of the questions which have been put as I can, and in particular those raised by the hon. Member for Hamilton (Mr. T. Fraser) and the hon. Member for Kilmarnock (Mr. Ross).
371 The House knows that the impact of this grant is different in Scotland than in England. In Scotland the educational effect is less important. I use the term "educational effect" as it was used in the debate last year by the. hon. Member for Newbury (Sir A. Hurd). We traditionally practise rotational farming, and in saying that I am in no way criticising the English system of farming. It is merely that perhaps climatic conditions make it different for us in Scotland. However, I believe that the grant is no less important in Scotland than in the rest of the United Kingdom as a means of underpinning the general agricultural structure. It is an injection of money as determined by the annual Price Review, and I am sure that neither the hon. Member for Kilmarnock nor the hon. Member for Hamilton would expect me to give away Scotland's right to a share of this production grant.
The hon. Member for Sunderland, North (Mr. Willey) used the words, "some way to go". I do not recollect my hon. Friend using them bat I take the point made by the hon. Member for Sunderland, North. I think it would be useful if I gave the figures for 1959 for England and Wales on the one hand and Scotland on the other with regard to tillage, temporary grass and permanent grass. In England and Wales there were 9,031,000 acres under tillage. The figure for temporary grass was 4,510,000 acres and for permanent grass 10,946,000 acres. The figures for Scotland were tillage, in round figures, 1,550,000 acres; temporary grass, 1,800,000 and permanent grass 1 million. Those figures illustrate that there is some way to go, certainly regarding England and Wales. If these grants were withdrawn in England and Wales there would be some chance of a slip back in the position.
I should like to say a word about Scotland and the Small Farmer Scheme. My hon. Friend illustrated how this is linked up with the ploughing grant. While the Scheme is not of the same importance in Scotland as in England and Wales, it is by no means negligible. We have received over 2,250 initial applications. About 1,500 detailed proposals have been submitted and 1,300 have been approved. This will bring 372 the small farmers a total of over £1 million in grant.
§ Mr. Leburn
On the other hand, the two do link together, as my hon. Friend tried to show in his opening remarks. These units get ploughing grants when they put their grassland into rotation, and also get up to three years of cropping at £9 an acre field husbandry grant, so in the first year, they get £9 plus £7. I make that point in passing.
My hon. Friend, the Joint Parliamentary Secretary, said that about half the applications in England and Wales are in respect of farms with less than 100 acres, and two-thirds for farms with less than 150 acres. Unfortunately, I do not have strictly comparable figures for Scotland, but I can say that 28 per cent. of grants last year went to farms classed as small—under £100 rental—and a furthec 31 per cent. to medium farms, with under £250 rental. So it is not just the big boys who cash in. It is fairly widespread throughout the community.
§ Mr. T. Fraser
When one looks at the number of small farmers in this country one sees that a high proportion farm under 100 acres. How would it be possible for either the Parliamentary Secretary or the Under-Secretary to yield any other figures than those they are producing at the present time?
§ Mr. Leburn
There has been a great deal of criticism that far too much of the money goes to the big farmers, whereas I am trying to demonstrate that there is a fairly widespread distribution and that a good share goes to the small farmers and medium farmers.
Turning to the question of over-payments raised by the hon. Member for Kilmarnock and the hon. Member for Hamilton, first of all, I do not in any way under-estimate the seriousness of this whole business. The amount of wrong payments uncovered amounted to £11,751, relating to 159 applications. These are the figures I have.
§ Mr. Leburn
I understand that, so far as it is humanly possible to know, these are the complete figures. Virtually the 373 whole of this amount has been recovered. The estimate for the Scheme year 1958–59 provided for the payment of grants up to a total of £2,400,000, so incorrect payments amounted to one half of 1 per cent. of the total payments. That does not in any way excuse the fact of the one-half of 1 per cent., but it is right to keep the amount in perspective.
The wrong payments arose for the following reasons: first, acreages overstated were 56½, equalling £395 10s., and, secondly, acreages claimed which were not under grass for the requisite period amounted to about 1,620, equalling £11,355.
The hon. Member for Kilmaraock asked what happened to those farmers who had fraudulently claimed payment from the Department of Agriculture. As I say, most of the amounts have been recovered, but in a certain number of cases—I am sorry that I cannot give the exact number, but it is a comparatively small number, something like four, five, six or seven—the matter was reported to the legal authorities, but I am afraid I cannot tell the House what then happened. When my Department believes that fraud has taken place, it is our duty to report the matter to the Procurator Fiscal or to the appropriate legal authority, but there the responsibility of my Department in the matter ends. I know that the matter was reported where we believed that any question of prosecution for fraud arose. I can only say that having undertaken these most recent checks, I believe that the Scheme is now watertight as far as it is reasonably possible for any scheme to be watertight.
§ Mr. Leburn
I do know that in that case the question was reported, but I do not think it is for me at this Box to report what happens when a prosecution takes place in the courts.
§ Mr. T. Fraser
Surely what happened in that case is much more relevant to the passage of this Scheme than the number 374 of applications which have been made under the Small Farmer Scheme. Surely what has happened under this Scheme— these disclosures of the Comptroller and Auditor General that have caused these inquiries to be made and which have uncovered a good many other irregularities—are matters which the Undersecretary feels obliged to report to Parliament before he seeks assent of Parliament to the continuation of this Scheme?
§ Mr. Leburn
Whene we thought there were any reasons for reporting questions of fraud we did so. In other cases there were minor deficiencies of acreage, but we did not think that there was any question of deliberate fraud. But even where we do report cases it does not necessarily follow that because we in the Department think fraud may be involved, the legal authorities or the Procurator Fiscal take proceedings.
§ Mr. Fraser
Of course not, but does not the hon. Gentleman take the view that when he has about 159 persons —he gave us a figure which has not been reported so far as I know—who claim ploughing grant in respect of land which had not been down to grass for the minimum period of three years, these people were prima facie guilty of falsifying their returns and that every one of those farmers ought to be reported to the authorities for the purpose of prosecution?
§ Mr. Leburn
I could not necessarily accept that at all. I could not necessarily accept that there was a case of deliberately falsifying the returns. If I may return to the question of the official, I can report that he was prosecuted.
§ Mr. Morris
The hon. Gentleman referred to the figure of four, five, six or seven cases outstanding and he said that those were referred to the legal authorities but that he is not in a position to say what happened. Are we to understand that none of the people in the other cases was reported?
§ Mr. Leburn
I think I am right in saying, though I should like to check 375 it, that nothing happened in other cases, but in a small number of cases where, in our opinion, there was evidence of fraud reports were made to the law authorities.
I should like to answer some of the points raised by the hon. Member for Aberavon (Mr. Morris). The hon. Member asked for the latest available figures for ploughing grants in Wales. He gave figures from the Digest of Statistics for 1958 as follows: leys, £770,000 paid for 109,527 acres; old grassland, £77,000 paid for 6,419 acres. The comparable figures for 1959 are: leys, £776,000 paid for 110,575 acres; old grassland, £83,000 paid for 6,916 acres. So there is at least a slight increase.
The hon. Member asked whether the Scheme could not apply for ploughing done in periods under three years. That would be impracticable, as I believe would be his sugestion that we should discriminate in some way in favour of the small farmer. There would be practical difficulties in this regard.
The hon. Member also asked whether my hon. Friend had been able to find a way of making the £12 grant under Part II of the Scheme more flexible. Unfortunately, I have not been able to consult my hon. Friend on this matter, but as he has brought forward a Scheme under Part II in exactly the same form this year as last year it is highly likely that he did not find that practicable.
On the question of raising appeals where someone feels aggrieved about the Part II grant being withheld, I feel that if the matter is left to the agricultural executive committees one can feel confident that they will fairly and conscientiously look at any question.
In conclusion, I must emphasise that the ploughing grant is a valuable incentive to a wide range of farmers. It encourages them to plough regularly, and, in consequence, better grassland should help us to feed our livestock more economically from home resources, so improving the competitive position of home agriculture in accordance with the Government's policy as set out in the Annual Price Review White Paper.
376 Criticism could be made against any production grant. A number of hon. Members have raised the point that farmers would carry on the operation with or without the grant. If we took off, for instance, the lime subsidy, I believe it could equally be argued that farmers could not afford to give up putting the amount of lime on their land which they are at present doing, but in practice to some extent they would, and I believe that to some extent they would cash in on the build-up fertility of the land.
The ploughing grant has its place, therefore, at the present time anyhow, in the general support structure as determined in the Price Review. But I want to make it clear that we are always reviewing these grants, and, certainly, I am sure that my hon. Friend and I will look very carefully into them again after what has been said tonight. With that, I hope very much that the Schemes will be approved.
§ Question put, and agreed to.
That the Ploughing Grants Scheme, 1960, a draft of which was laid before this House on 28th April, be approved.
§ Ploughing Grants (Scotland) Scheme, 1960 [draft laid before the House, 28th April], approved.—[Mr. Leburn.]